How should this risk be categorized in the risk matrix?

The risk assessment team in Southern California has estimated that the probability of an incident that has potential to impact almost 80% of the bank’s business is very high.

How should this risk be categorized in the risk matrix?
A . High
B . Medium
C . Extreme
D . Low

View Answer

Answer: C

Explanation:

In the context of risk assessment, an incident that has a very high probability of occurring and the potential to impact almost 80% of a business is considered an extreme risk. This categorization is based on the severity of the impact and the likelihood of the event. The risk matrix, a tool used in risk assessment, helps in the classification of risks by considering both the impact and the probability of potential incidents. An event that affects such a significant portion of the business would typically necessitate immediate attention and the implementation of mitigation strategies to prevent substantial loss or damage.

Reference: The Certified Network Defender (CND) curriculum includes principles of risk assessment and the use of risk matrices to categorize and prioritize risks. It outlines that risks with high impact and high probability should be classified as extreme, requiring urgent action12.